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Determine the wacc for chippenham hospital

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Reference no: EM132755771

Problem 1: You are to determine the WACC for Chippenham Hospital. Provide a brief report in which you state your determination of WACC, describe and justify how you determined the number, and provide a relevant discussion of your findings. Refer to the WACC formula : WACC = Kd(1-t)(D / V) + Ke(E/V)

Assumptions:

  • Chippenham Hospital has a cost of debt of 6%, a corporate tax rate of 40%, and a debt weight of 60%.
  • Chippenham Hospital has a cost of equity of 11.4% and an equity weight of 40%.
  • U.S. corporate tax rates for 2020 are 21%. Recalculate your WACC based on the new tax rates. Describe the impact of changes in corporate tax rates on Chippenham Hospital's WACC.

Reference no: EM132755771

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